IRD have recently clarified their position on gifts of food and drink, ie hampers, Christmas ham etc, and these gifts now fall under the Entertainment rule and are only 50% deductible as there is a private benefit. It makes no difference whether the gift is to staff, suppliers or customers. Gifts other than food and drink are still 100% deductible as long as it’s business related, keep in mind FBT for staff. As before, any meals, drinks and entertainment are only 50% deductible, unless it is morning or afternoon tea or meals while travelling, however not if accompanied by a potential or existing business contact in which case it is only 50% deductible.